The Cost of Travel in Iceland: My Detailed Budget Breakdown


Iceland is the land of marvel. 

From the breathtaking landscapes to the welcoming locals, the wonders of this country were obvious from my first cold steps on Icelandic terrain. 

During my time spent traveling in the Land of Fire and Ice, my four girlfriends and I stood in awe at waterfalls streaming from towering mountains, explored a volcanic crater-turned-lake, mere steps away from an active geyser, skipped over black sand beaches, and crunched our way across turquoise glaciers.

And to my surprise, Iceland wasn’t as expensive as I was expecting, either: there’s truly something for all budgets. 

We were able to score some affordable Airbnbs, save costs by splitting a car rental, and reduce our food budget by cooking in our accommodation for several meals, meaning that our time in Iceland was pretty inexpensive.

The busiest time of year is mid-June through to August, so you can expect prices to spike during these summer months. And while Reykjavik offered up some pricier options, it still won’t be a stab to the wallet if you and your friends decide to hit the town for the night. Oh, and that’s an activity I definitely recommend.

Once you leave the big city, you’ll find prices on food and accommodation dip to a more comfortable level. And with free activities scattered all over the island, there’s plenty of ways to keep your costs even lower.

So how much does it cost to travel in Island? In this article, I’m going to be sharing exactly how much you can expect to spend.

One of my greatest joys in travel in Iceland was getting to stay in lovely huts surrounded by snow-capped mountains

The Cost of Accommodation in Iceland

Reykjavik – KEX Hostel ($25 a night for an 8 bed dorm/$41 a night for a private room) 

Kex has been named the Most Unusual and Awesome Hostel in the world by Deep Travel and Lifestyle. They weren’t wrong! When we caught wind of this award, we booked our first stay in Iceland at Kex. 

I loved the beautiful views of Mount Esja from this hostel, and the smell of the ocean just steps away made the experience even cooler. But that’s just the tip of the iceberg (no pun intended, Iceland!). There’s an eclectic mix of vintage and contemporary throughout the hostel, from books to furniture. The vibe is unbeatable, just as the full circle bar on the third floor is magnetic. The craft cocktails are, well, crafty and the beer and wine selection is vast. The rooms are comfortable and clean, and there are private rooms and dorms up for grabs. 

If you’re travelling on a budget, this is easily the place to stay in Reykjavik.

Akureyri — Studio By the Sea (Airbnb apartment, $73 a night) 

This is a knockout. 

This Airbnb rests in a small village (but not a small word), Svalbardsstrond, just outside of Akureyri, and the house itself has a front row seat of the surrounding lake and distant peaks. The area offers a variety of hiking trails frequented by the residents of the small town and visitors, alike. 

The views from the home are unmatched, especially as you relax in the hot tub, which doubles as a chill chair to gaze out into your temporary property. If you’re not in the mood for hot tubbing, no problem! Two decks are perfectly perched for soaking up the views.

And the best part? Although it’s a studio, it has two beds, so you can pile in your friends for a cheaper split.

Seydisfjordur- Hafaldan HI hostel, Harbour ($39 a night in a 4-bed dorm/$92 a night in a private room): 

Situated in the old harbour and just a 30-minute drive from the Egilsstaðir Airport, this hostel offers cozy vibes on top of cozy vibes. And most importantly of all, it’s the cheapest place in town. If you’re on a tight budget, this is the place for you. 

The décor and overall ambiance is welcoming, thanks to its nooks and crannies lining the common area. The dining room has a natural backdrop of the harbour and the colors of the walls come in at a close second for the best view in the place. Wooden farm tables and pops of happy colors (think blues and oranges) might just steal your gaze away from the view, but not for long. Common activities around the hostel include fishing, golfing and hiking.

Stykkisholmur – Helgafell ($90 a night): 

Even though it’s only four miles from the town center, you’re in your own dreamy world at the Helgafell.

The cute cottages are surrounded by mountainous veils and stellar lake views. This location is so much about the solitude that you might feel as though you have the whole planet to yourself. Each room is equipped with plenty of space for up to two people and includes a kitchen, bed, sofa, and a balcony with epic views. But if you feel the need to get out into nature, that too is an option, as it’s just a short walk down to the lake. Wanting a longer trek? Helgafell has some of the best hiking in this area of Iceland. 

Hafnarfjörður- Hotel Viking ($62 a night): 

Have you ever fancied spending the night in a Viking-themed hotel? In Iceland, you can! 

Staying at Hotel Viking is like stepping into a history book. 

The décor is inspired by the Viking presence found in Iceland, and most recently made uber popular by Netflix shows like Vikings. What I loved most about the hotel, though, is the Viking-esque chow hall and saloon. A clunky wooden bar and long communal tabletops make it possible to imagine a drunken and lively feasting of Viking men and women. Both traditional Icelandic cuisine and Viking meals are served at the hotel restaurants, Valhalla and Viking Restaurant.

Conveniently, there is a shuttle bus from the Keflavik International Airport that drops visitors off at the front steps of this seaside town, so it’s super-easy to get to. 

The average cost for accommodation in Iceland is $41 a day. 

The Cost of Transportation in Iceland

Getting to Iceland isn’t as expensive as you might think.

In the United States, Boston and New York offer some reasonable fares for under $400 for a straight dash overseas and back. If you’re coming from Europe, you’re in greater luck: round-trip from Paris starts at $200 while London starts at a measly $85. I use Skyscanner to find affordable flights.

Traveling by car is the most popular and sensible mode of transportation in Iceland, so this is most likely what you’ll opt for. It’s easy to get around the country with the help of a single road, the Ring Road, which connects every big city and town along its 828 miles of paved concrete. 

Although Iceland doesn’t have a railroad system, there are bus services for those of you who don’t want to drive; however, on long treks from one city to another a domestic flight might be the best option. Straeto gives some great bus routes for traveling in and around the capital city. See below for a variety of transportation options:

  • Flight from Reykjavik to Akureyri: $61
  • Flight from Reykjavik to Seydisfjordur (EGS): $89
  • Bus from Reykjavik to Stykkisholmur: $14
  • Strætó Bus app fare per month: $10
  • 3-day pass in the Reykjavik area $3.50
  • 1 day pass in the Reykjavik area $1.50

Self-drive tours are available in all shapes and sizes. A 7-day self-guided tour starts from $892 and includes a detailed itinerary, rental car, accommodations and breakfast along the way. If you’re apprehensive about tackling the country on your own or don’t have the time to research your own itinerary, this is the option for you. Icelandic Nordic Visitor has dozens of self-drive itineraries to sign up for.

If, however, you are up for the adventure and motivated to save some bucks, I would recommend renting your own car and booking your own accommodation. We were able to see so many Nordic nooks by simply having freedom during our weeklong trip to turn right, left or stop beside an isolated hot spring to go for a dip with nobody else around.

When it comes to going it alone, Northbound is a fantastic website that finds and filters through the best car rental deals in Iceland. Depending on the size of your crew, you can get a car starting at $23 a day. 

The average cost of transportation in Iceland if you rent a car: $23 a day

The average cost of transportation in Iceland if you use public transport, including flights and buses: $14 a day

The average cost of transportation in Iceland if you opt for a self-guided tour: $127 a day.

The Cost of Food in Iceland

We all must eat and thank goodness for that because the traditional and contemporary cuisine in Iceland is top notch. 

First and foremost, you can’t leave the country without eating a hot dog. That’s right, a hot dog. This popular street food has made a tasty name for itself in Iceland. It’s cheap, good, and easy but you can also find them dressed up or offered vegan in restaurants all over the country. 

If you plan to eat out, breakfast will be your cheapest meal from $9 to $15 depending on how hungry you are. A coffee runs around $4 while a croissant is $5. However, be aware, lunchtime and dinnertime prices rise significantly. 

Dinnertime will be your most hefty splurge where you can expect to spend anywhere from $25 to $40. However, don’t let that deter you from sampling the culinary masterminds that reside in Iceland. 

Icelandic Fish and Chips, in Reykjavik, is a great joint to get a feel for Icelandic fare with their fish and chips running for $22. 

Reykjavik’s Islenski Barinn, or the Icelandic Bar, is where you’ll want to go to if you’re craving a local vibe with traditional Icelandic eats. Yes, it’s a bar but no, you won’t find your typical boring bar food. From lamb and salmon hotdogs to shark bits, reindeer and vegan burgers, you can expect a more upscale pub experience. However, prices are doable, starting at $14 for a meal.

When it’s time to treat yourself, find Von Mathús in HafnarfjordurIf. The terrific thing about Von Mathús is you get to soak up the classy and contemporary setup and splurge on the delectable food, without the wild prices of a fine dine. The menu isn’t hefty, but it’ll do the trick. You can dip into some ceviche for $19 or opt for a snack from from $5. They also enjoy their happy hour; it’s practically all day (11:30 am to 2 pm/4 to 8 pm). 

Speaking of happy hour, it’s kind of a thing in the capital. Loft Hostel is most popular thanks to the rooftop terrace that yanks locals and visitors in from the street, begging them to sip for a few. They have beer deals from 4 to 8 pm daily. 

Vedur Bar & Café is a classy establishment that loves sharing their discounted beverages. So much in fact their “happy hours” stay happier longer. Every day from noon to 7:35 pm (yes, they are precise on their cutoff time) followed by cocktail hour from 7 to 9 pm, patrons file in to enjoy the offerings. You should also know, Thursdays are a special day at the Vedur, where bubbly flows for only $7.

Of course, if you opt to not drink, it will lower your costs. Alcohol is on the steeper side in Iceland especially if you are buying it full price in a pub. Your best option? Load up at the grocery store where imported beers run about $4 and it’s $3 for local brews, while the average midrange bottle of wine goes for approximately $15. 

If you have access to a kitchenette in your hostel, or a whole kitchen situation in your Airbnb, then buying food at the market is the cheapest overall option. Groceries are comparable to what you might spend in the U.S. For example, a gallon of milk in Iceland is approximately 643 Kr, about $5, a pound of chicken fillets is 911 Kr, or $7 and a dozen eggs are 675 kr, or about $5. Whenever possible, shop at Bonus, it’s easy to find (bright yellow) and offers the best discounts on food. 

The average price for eating out in Iceland is $77 a day

The average cost of food when cooking at home in Iceland is: $14 a day

The average cost of food when combining both eating out and cooking is: $46 a day

The Cost of Activities in Iceland

This is Mother Nature’s playground, making outdoor activities and sightseeing unending. 

That, on top of the nightlife, daytime biking adventures, and strong gastronomic scene, make it easy to keep busy. 

The first thing you’ll want to do when you arrive is head to the Blue Lagoon. One of the biggest tourist attractions in all the land is the Blue Lagoon. It’s worth the dip but expect to share the experience with many others. It’s popular for a reason!

The Blue Lagoon costs $45 for a day admission and with that you get an alcoholic beverage (we chose champagne!) and hours of whirling around the hot pools. If you’re not into commercial tourist activities, fear not: solitude (and free hot springs!) is not hard to find as long as you’re up for the adventure. 

Reykjadalur Hot Springs requires an hour-long hike to get to but once you arrive you have a whole river to soak in. Grotta Lighthouse Footbath is in Reykjavik and is easy to access but note the word “foot” in the name: it’s not very deep but it is unique!

There’s a surplus of day trips available to visitors from Reykjavik through Viator for those of you who are short on time. Some of the best options for seeing the country from your base include:

South coast day trip – $120 

Lava tunnel caving and snorkelling – $180

Golden Circle day trip – $113

Day Trip to Snæfellsness Peninsula – $340

Ice cave day trip – $470

One of the most memorable moments from our trip was hiking  the Sólheimajökull Glacier, where we were able to propel down crevasses and drink the most delicious 400-year-old water. 

Biking is also a fun and trendy way to sightsee in the capital and if you are feeling rather adventurous you can book a tour to navigate the more distant terrain on two wheels. Reykjavik Bike Tours offer guided day trips to the Golden Circle, Coast of Reykjavik and Westman Isles, to name a few. Prices for bike rentals start at $27 while guided tours start at $58.  

And, of course, the Northern Lights. 

I can’t write an article on Iceland and not highlight the lights! We went in late September with the goal of seeing the decorated night sky. It was quite the gamble but a gamble we won. Soaking in our hot tub at the Airbnb, we were able to gaze up in awe at the illuminating fluorescent swishes dancing above us. It was most certainly a moment to remember. 

If you can, book your trip during the months of September to March and hunt down those lights. You won’t regret it! 

Driving the roads of the countryside in Iceland is one, if not the best, way to see and feel the essence of the country. Beginning in Reykjavik, the Golden Circle is a 190-mile circle of sorts that offers a wealth of natural beauty. Big ol’ blocks of ice, more commonly referred to as glaciers, black sand beaches with natural ice sculptures the size of me, funky moss, and tiny elf houses line the route around the circle. It’s an endless intake of unbelievable wonder. 

Whatever you do, don’t forget your camera because you can expect a photo op around nearly every bend in the circle. 

The great thing about the Land of Fire and Ice is the best things are often free. Soaking in the natural beauty is the best way to experience the country on a budget, whether by car, bicycle or foot. 

Even walking out of your hostel can be a beautiful experience with the right vantage point.

The average cost of activities in Iceland is: $29 per day

How Much Does it Cost to Travel in Iceland?

So much can you expect all of this to cost? Well, if, like me, you travel on a mid-range budget, with occasional dips into the world of budget travel, you can expect to average:

Accommodation: $41 per day
Transportation: $23 per day
Food: $46 per day
Activities: $29 per day

Total amount spent per day: $139 per day

So, what do you think? Is Iceland more or less expensive than you expected?

Kelly Fay is a California native but has lived and traveled all over the world. She loves writing, books, sweating (during a workout, that is!), coffee, wine, traveling solo and her daughter, Ireland.

[Images via:  Kuznetsova Julia, Cheng Yuan, Boyloso, biletskiyevgeniy.com, Kristina Ponomareva — all from Shutterstock]
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